Carillion to sell PFI know-how abroad

2000-03-17T00:00:00+00:00

Carillion is planning to export its private finance initiative expertise to Canada, the Caribbean and Ireland.

Speaking at the firm's first year-end results since last summer's demerger from Tarmac, chairman Sir Neville Simms said he expected to land a PFI-style deal in one of these countries within two or three years.

Chris Girling, Carillion's finance director, is embarking on a two-week tour of City analysts and investors to help them factor the company's complex PFI deals into their share valuations.

Carillion believes that the group's PFI portfolio as it stands will contribute about £10m to operating profit each year for the next 25 years.

For the 12 months to December 1999 the company reported pre-tax profit of £35.1m, 79% up on the previous year's figures. Turnover slipped 3% to £1.8bn.

At the results meeting, Sir Neville admitted that the City had tended to adopt a sceptical attitude to such figures. "They didn't see us in the past as being very honest," he said. "But with the five segments to the business we now have, they are going to be able to see under our skirts a lot quicker. We have also decided to be less aggressive in our profit recognition." Sir Neville said that PFI, services and infrastructure management work accounted for half of operating profit and two-thirds of the group's £2.26m order book.

Turnover in the building division fell 8% to £711m, though operating profit was up 8% to £16.7m. The services business raised operating profit 53% to £8.6m on turnover up 12% to £323m. PFI work fell £2m to £95.1m but profit nudged up from £4.8m to £5m. Turnover in capital projects fell 8% to £490m, but operating profit rose 24% to £4.2m. Overall margins were up from 2% to 2.3%.

Sir Neville said that his margin target of 3%-3.5% could be set higher.